August 2013
CONSTRUCTION WORLD
2
THE COMPETITION COMMISSION
recently
announced that it is fining 15 construc-
tion companies who admitted to collusive
tendering a combined R1,45-billion. These
fines were agreed with the Competition
Commission under its Fast-Track Settlement
Process that was launched in February 2011.
The Commission found in excess of 300
cases in which the bids were rigged. The 15
fines ranged from R155 000 to more than
R300-million.
The findings of the Competition Commis-
sion are relevant for two reasons. The first is
obviously that it confirms that such behav-
iour in un-competitive. It is also – and here
I borrow from Public Works Minister Thulas
Nxesi who recently spoke at the national
Stakeholder Forum of the Construc-
tion Industry Development Board
(cidb) – anti-transformative.
He is of the opinion that bigger
companies “close off opportunities
to smaller companies”. He also stated
that such behaviour undermines
the expected social and economic
benefits that arise from construction
projects which represent a setback
for transformation – work on projects
are kept and divided among the inner
circle, unfortunately oftenwhite com-
panies. Whatever the motivation was
at the time, in retrospect, the major players
in the construction industry certainly did not
do themselves any favours.
On the one hand there have been calls for
drastic action against the large construction
firms who are guilty of bid rigging, and on
the other there is concern that such action
may seriously hamper Government’s infra-
structure roll-out plan. Nxesi reckons the
latter view is “misled”. For him “corruption is
corruption” – whether you are a big or small
company – an even hand is needed when
stamping out corruption.
He said it appears as though there are dif-
ferent rules for big white-owned companies
and black owned companies.
ot doing themselves any favours
What this bid rigging debacle has done is
that it highlighted criminal tendencies in
construction, but also, and perhaps more
importantly, lack of transformation.
This, in the very sensitive South African
context, leaves the worse taste.
Nxesi said that the findings of the Com-
mission are the ideal opportunity to establish
systems and processes for his department
whereby corruption is eradicated. It is also
an opportunity to create a strategy that
promotes partnerships in support of national
objectives. This, together with ethical prac-
tises leads to transformation.
This is especially important when consid-
ering that the National Development Plan
in the form of the National Growth Plan,
the Presidential Infrastructure Coordination
Commission, the Strategic Integrated Proj-
ects and the National Development Plan is
going to require mobilisation of the entire
construction industry’s capacity and a variety
of partnerships.
At the most basic level, however, those
guilty of bid riggingmust start rebuilding the
trust that has been lost.
WILHEM DU PLESSIS
EDITOR
